Olympus value mauled after president’s ousting

Olympus Corporation is so battered after ousting its first non-Japanese president that potential acquirers could snap up the entire company for 37 per cent less than the value of its medical-equipment business alone.

Shares in the Tokyo-based maker of endoscopes and cameras have plunged 44 per cent, the biggest drop in at least 37 years, since president Michael Woodford was fired by the board last week after calling for a probe of company payments made to advisers. The slump left Olympus with a market capitalisation of $US4.9 billion yesterday, $US2.9 billion less than the value of its medical unit.

While Olympus owes more money than 98 per cent of Japan’s biggest companies versus common equity and while camera revenue tumbled in the past three years, it still sells three times as many endoscopes as its competitors combined.

Further declines in the stock may attract medical-product rivals from Hoya Corp to Johnson & Johnson , BGC Partners and Atlantis Investment Research Corp said. “The endoscope business is the jewel for Olympus," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo. “The company is attractive to many companies that want to start or expand their medical-equipment business."

Founded in 1919 as a microscope and thermometer business, Olympus produced its first camera in 1936 and its first “gastrocamera", a predecessor to the modern-day endoscope, in 1950, according to its website.

Worth about $US12 billion four years ago, Olympus lost almost $US4 billion of its market value in the past four days after Briton Mr Woodford was fired and a PwC report he commissioned said the company may face regulatory and legal scrutiny because of payments made to advisers in the acquisition of Gyrus Group in 2008. Potential offences may include false accounting, financial assistance and breaches of duties by the board.

Olympus, which said the report included “assumptions" and “speculation" and was misleading, dismissed Mr Woodford because he bypassed unit managers to give orders directly to employees and “wouldn’t listen", according to chairman Tsuyoshi Kikukawa.